Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain
Officers; Compensatory Arrangements of Certain Officers.
As previously reported by BioDelivery Sciences International, Inc. (the
“
Company
”) in its Current Report on Form
8-K
filed with the Securities and Exchange Commission (the “
SEC
”) on October 29, 2018, Ernest De Paolantonio retired from his
position as Chief Financial Officer, effective December 31, 2018. Mr. De Paolantonio remained in the position of Chief Financial Officer until Terry Coelho took over the position effective as of January 15, 2019. Unless Mr. De
Paolantonio resigns or his employment is terminated earlier, Mr. De Paolantonio will continue as a senior advisor to the Company until April 30, 2019, at which time his employment with the Company will end (the “
Retirement
Date
”).
On January 23, 2019, the Company entered into a Transitional Service and Separation Agreement (the “
Separation
Agreement
”) with Mr. De Paolantonio, which provides for, among other things, Mr. De Paolontonio to (i) continue to receive his current base salary, (ii) remain eligible to participate in the Company’s group employee
benefit plans as a regular full-time employee, and (iii) continue to vest in his outstanding equity awards until his Retirement Date. At the termination of his employment with the Company, provided that, among other things, Mr. De
Paolantonio is not terminated by the Company for “cause,” Mr. De Paolantonio will be entitled to receive (a) a
one-time
cash payment of $360,000, subject to applicable deductions and
withholdings, representing one full year of his current base salary, provided that Mr. De Paolantonio has not breached any of his continuing obligations, including that he signs and does not revoke a general release of claims against the
Company, (b) his target annual incentive compensation for 2018 (subject to determination by the board of directors of the Company), and (c) a monthly cash payment for three months in an amount equal to the actual costs of continuation of
Mr. De Paolantonio’s group health and dental insurance under the Consolidated Omnibus Reconciliation Act of 1985.
Additionally, the option
exercise period for the vested incentive stock options granted to Mr. De Paolantonio on October 1, 2013 shall be extended through the remainder of the option period which ends on October 17, 2023, and any incentive stock options held
by Mr. De Paolantonio shall be treated as nonqualified stock options if exercise is not undertaken within 90 days of the Retirement Date. All time-based restricted stock units held by Mr. De Paolantonio that would have vested had
Mr. De Paolantonio remained employed by the Company through December 31, 2020 shall be deemed vested as of the Retirement Date, and all time-based restricted stock units held by Mr. De Paolantonio that by their terms vest after
December 31, 2020 will be forfeited as of the Retirement Date. Subject to Mr. De Paolantonio’s service through the Retirement Date, all performance-based restricted stock units shall remain outstanding and eligible to vest with
respect to the Company’s performance through December 31, 2020 and any performance-based restricted stock units that do not vest based upon performance through December 31, 2020 shall be forfeited.
The foregoing summary of the Separation Agreement is qualified in its entirety by reference to the full Separation Agreement filed herewith as Exhibit 10.1
and incorporated by reference herein.